Putin agrees to restructure Ukraine’s $3 billion debt

Russian President Vladimir Putin is proposing restructuring the $3 billion debt owed by Ukraine to his country, the Associated Press reports.

At the G-20 summit meeting in Antalya, Turkey, where world leaders focused on cooperating to fight Islamic extremism, Putin referred to $1 billion installments of the debt.

Russian Federation asked that the United States or “one of the reputable worldwide financial institutions” guarantee the loan, the RBC news agency reported Tuesday. Ukraine’s Prime Minister Arseniy Yatsenyuk however said Ukraine estimates potential losses of Russia’s food embargo in 2016 at $600 mln. “We await the outcome of those discussions”.

The Russian authorities have made a decision to introduce food embargo against Ukraine, Russia’s Minister for Economic Development Aleksey Ulyukaev said.

The Russian authorities’ proposal was widely viewed as a crucial step towards more stability in Ukraine as fighting between government forces and Russia-backed separatists in eastern Ukraine died down.

“We’re ready to hold wider consultations with Ukraine, the worldwide Monetary Fund and other participants on this issue, and to discuss specific details of our proposal so they’re acceptable”, Siluanov told reporters in Moscow Wednesday.

Meanwhile, the Ukrainian Finance Ministry said it “hasn’t received any direct information and has no comment at this time”.

In August, a creditor group reached a $15 billion restructuring agreement with Kyiv that included a 20 percent principal writedown and a four-year maturity extension.